It'll be a deterrent alright -- it'll deter everyone from flying who doesn't absolutely have to fly.
I see lots of money rolling into the highway tax coffers...
Here's the bottom line: anyone who would put up with that kind of treatment by choice doesn't have to bother paying for airfare. Simply sticking up the local "stop 'n' rob", and then hanging around until the police arrive, will be all it takes.
The thing is, there just aren't that many folks who LIKE being put through the "prison experience." What you are proposing for air travel would place the "experience" several notches below the common prison.
Consider: to "experience prison", you don't have to PAY for reserved seating! You only need to steal something! (And, you run a nonzero chance of NOT getting caught, so, either way you come out ahead, LOL!)
Yes, it really is absurd once you take a good look at it.
The hardnoses will just call you a kiddie.
I don't think there's much inconvenience in the idea at all. Everyone gets a seat, just not necessarily the seat he might want. No seat on a plane is like prison (except if one were forced to sit the durance of the flight in the loo), so I disagree with your objection.